Page 117 - GSTL_13th August 2020_Vol 39_Part 2

2020 ] IN RE : SAINT-GOBAIN INDIA PVT. LTD. 203
with glass-fibre with 94% of gypsum and adhesives; approximately 5% of paper;
and > 1% of glass fibre, whose stated purpose is to produce a strong composite
material having improved tensile and impact properties which shall increase the
flexural, tensile, compressive and impact strength of this glass fibre composite.
2.2 Applicant feels that the impugned product is classifiable under
Heading No. 6809 of the Customs Tariff Act and as per Serial No. 180C to Sched-
ule III of the Notification No. 1/2017-C.T. (Rate), dated 28-6-2017, such goods are
subject to the levy of GST at the rate of 18%.
2.3 However, Notification No. 1/2017-C.T. (Rate), dated 28-6-2017 pro-
vides for concessional rate of GST @ 12% on supply of “Glass-fibre Reinforced
Gypsum Board”. As per Sr. No. 92 of the said Notification, to claim the benefit of
concessional rate of GST, the two conditions required to be satisfied are that (i)
The goods should be classified under Chapter 44 or any chapter; AND (ii) The
goods should qualify with the nomenclature mentioned in column (3) of the noti-
fication.
2.4.1 It is submitted that there is no dispute regarding the classification
of the proposed product, since Sr. No. 92 of the Schedule-III of the Notification is
applicable to goods falling under ‘any chapter’. Thus, the first condition as men-
tioned in point (i) above stands satisfied.
2.4.2 The applicant contends that the subject product can be classified
as GRG. Applicant proposes to add glass-fibre upto one per cent of the total
weight of the ingredients of the gypsum board in order to increase flexural, ten-
sile, compressive and impact strength of the board to give reinforcement to the
resultant product and therefore applicant is of the opinion that the proposed
product is a ‘Glass-Fibre Reinforced Gypsum Board’ and is covered under Sl. No.
92 of Notification No. 1/2017 mentioned above. Applicant has also stated that
the percentage of glass fibre to be used in the gypsum board is immaterial for the
product to be classified under Sr. No. 92 mentioned above.
2.5 Thus, the impugned product could be considered as GRG in order
to avail the benefit of concessional rate of GST in terms of Sl. No. 92 to Schedule-
II of the Notification No. 1/2017-C.T. (R) even if such resultant product does not
conform with IS standards as prescribed by the government for a GRG board.
The adding of lower percentage of glass-fibre to the proposed product shall not
exclude it from being identified as GRG. It can be inferred that the intention of
the Legislature is to provide the benefit of concessional rate of tax to gypsum
board reinforced with glass-fibre, containing any quantity of glass-fibre, however
miniscule it may be and providing reinforcement ability. The benefit of such no-
tification cannot be denied to the applicant simply on the criteria of quantity of
glass-fibre, when such disqualification is not provided under the notification.
Applicant has cited case laws to support their contention.
2.6 It is further submitted that, applying the Literal Rule of Interpreta-
tion, it can be said that where no quantity of glass-fibre is specified in the notifi-
cation for qualifying it as GRG, presence of any amount of glass-fibre in the gyp-
sum board, giving it reinforcement, shall make it eligible to be classified as GRG.
2.7 In the alternative, even if it is argued that Serial No. 180C to Sched-
ule III of Notification No. 1/2017-C.T. (Rate) & Sr. No. 92 to Schedule II of the
same notification are competing entries, then the appropriate classification of the
above-mentioned products shall be determined as per the General Rules of In-
terpretation and as per Rule 3(a) of the General Rules of Interpretation, the head-
GST LAW TIMES  13th August 2020  117